G.O.P. Points to Welfare Overhaul as a Model for Health Care. The Comparison Has Limits.

WASHINGTON — As they propose to give each state a wad of federal cash to replace the Affordable Care Act’s health insurance, Senate Republicans have a ready comparison to press their case: the overhaul of welfare adopted two decades ago.

But the authors of the Senate’s latest bill to repeal President Barack Obama’s health law face one glaring flaw with the analogy: Few people would applaud a dramatic plunge in health insurance coverage the way they cheered the steep declines of the welfare rolls after the 1996 welfare law went into force.

For Republicans, the comparison makes for a compelling political argument.

“In 1996, we block granted money for welfare reform, and it worked like a charm,” said Senator Lindsey Graham of South Carolina, an architect of the health care plan. “We put governors in charge of the program. We held them accountable.”

President Trump got into the act when he praised block grants on Twitter.

But health care is not welfare, and voters may not accept the analogy. The welfare law, signed by President Bill Clinton, ended the federal guarantee of cash assistance for the nation’s poorest children and gave states vast new authority to run their own welfare and work programs with lump sums of federal money.

So too would the Senate Republican bill eliminate the entitlement to Medicaid and health insurance subsidies for many low-income people and would give the money to states, along with sweeping discretion over how to use it for health care or coverage.

“We give states the flexibility to come up with their own solutions,” said Senator Bill Cassidy, Republican of Louisiana and a co-author of the health care bill with Mr. Graham. With that flexibility, he said, states will find that the money for health care block grants is adequate, just as they have found the welfare block grants.

Federal money for the basic welfare block grants has been set at $16.5 billion a year since 1996. If that sum was adjusted for inflation, it would be $25.5 billion.

“Do you ever hear a governor come to Washington and complain about not having enough money for their welfare program?” asked Rick Santorum of Pennsylvania, the former senator who helped devise the latest Senate health bill. “No, you don’t. Why? Because we gave them the money and the flexibility to be able to design a program that worked for them.”

But it was easier for states to do more with less when they had fewer people to worry about. After the welfare law was enacted, the number of welfare recipients plunged more than 50 percent in five years, to 5.7 million in 2001, from 12.3 million in 1996.

An equivalent drop in the number of people with health insurance or insurance subsidies would probably not be viewed as a great success.

The goal in 1996 was to help people move from welfare to work. With health insurance, the goal is to increase enrollment. And no one advocates time limits for insurance like the time limits on cash assistance.

Mr. Graham said his bill, providing $1.2 trillion for states to share from 2020 to 2026, would allow federalism to flourish. It “gets the money and power out of Washington,” he said, and “patients in this country will do better.”

But Representative Sander M. Levin, Democrat of Michigan, said the welfare program, known as Temporary Assistance for Needy Families, showed the risks of fiscal federalism.

“Those extolling the TANF block grant should check the record,” Mr. Levin said. “Federal dollars have declined by one-third in real terms, states have diverted funds for other purposes, and as a result the number of poor children served by the program has shrunk to an all-time low. If we follow this model for health care, many millions of Americans will lose their health insurance.”

Ronald T. Haskins, who helped write the 1996 welfare law as an aide to House Republicans, said it had clearly achieved one of its main purposes. “It has controlled spending,” he said.

“It was $16.5 billion in 1997, the first year of TANF, and it’s still $16.5 billion,” he said. “We are saving 30 to 35 percent, billions and billions of dollars, because there is no adjustment for inflation or population growth.”

On the other hand, Mr. Haskins said: “If you want to make sure people get health care or coverage with a block grant, that’s questionable. Over the years you will have to do more with less. States will have less money. That normally means they’ll have less coverage.”

One goal of the 1996 law was to require adult welfare recipients to work. To the consternation of conservatives, the flexibility provided by the welfare block grant has allowed some states to avoid the work requirements.

Conservatives worry that the Graham-Cassidy bill could allow states to set up and operate “single-payer” health care systems with federal block grant funds. Mr. Graham did nothing to allay this concern when he said last week on the Senate floor, “If California wants to go to single-payer health care, it can.”

That possibility alarms insurers. In a letter to Senate leaders last week, America’s Health Insurance Plans, a lobby for the industry, said the Graham-Cassidy bill could undercut the private market by “allowing government-controlled, single-payer health care to grow.”

Until the recession began in late 2007, the welfare overhaul was generally viewed as a success. Large numbers of single mothers took jobs in a strong economy as states revamped their welfare programs to emphasize work.

But the number of welfare recipients did not increase much when the economy softened and poverty inched up in the recession. Since 1996, the proportion of poor families with children who receive cash assistance has plummeted by about two-thirds.

“The program has provided a temporary safety net to fewer and fewer poor families,” said LaDonna A. Pavetti, a vice president of the Center on Budget and Policy Priorities, a liberal-leaning research and advocacy group.

Welfare is thus a poor model for health care, Democrats say.

“The Graham-Cassidy bill gives a super block grant blank check to the states,” said Senator Ron Wyden of Oregon, the senior Democrat on the Senate Finance Committee. “They can do whatever they want in terms of Americans’ health care, and it guts the funding for those block grants over a very short period of time. This will mean a whale of a lot of pain for vulnerable people.”